The government of the U.K. announced a new tax credit system this week designed to support the British film industry, which was applauded by the UK Film Council. In the Pre-Budget report, the Chancellor of the Exchequer confirmed the new rate of tax relief for low budget films (films budgeted up to £20 million) would be a net 20%. For big budget films (£20 million and above), the rate will be a net 16%. Both rates apply to the U.K. spend of a films budget, capped at 80%.
The tax relief will provide a solid base for the production of independent British films such as MRS. HENDERSON PRESENTS, BEND IT LIKE BECKHAM, SHAUN OF THE DEAD and VERA DRAKE, and, internationally, puts the U.K. in better position for attracting vfx-intensive U.S. studio films such as CHARLIE AND THE CHOCOLATE FACTORY and BATMAN BEGINS.
John Woodward, ceo of the UK Film Council, said, [This] is the best news the British film industry has received for five years. It marks a new era for the future growth of our industry, which operates in a highly competitive global marketplace. Its good news for the production of culturally rich British films that promote Britain around the world. Its also good news for jobs and the economy as we will be able to attract big budget films to U.K. shores.
The U.K. has one of the most highly skilled film workforces in the world and last year film production contributed £3.1 billion to U.K. GDP. The new tax regime will support everything from big budget films like HARRY POTTER, to lower budget British comedies and thrillers, as well as films from auteur directors such as Ken Loach, Michael Winterbottom and Mike Leigh.
The new tax relief announced will additionally mean amore flexible system allowing producers to phase tax credits taking them either at the start of production, or later when they are receiving profits from the film.
The Department for Culture, Media and Sport also announced details of a new cultural test, which would provide the gateway to accessing tax relief. The test for British films introduces a points system based on the content of the film, talent, practitioners and filmmakers to provide a clear definition of a British film.
For more info about the UK Film Council, visit www.ukfilmcouncil.org.uk.